the grim jobs report, the dow dropped 275 points, erasing all the 2012 gains. are we coming to the bottom, however? might this be a buying opportunity? you know, when the blood is on the street, it can be a good time to buy. "the kudlow report" moments away. oh, listen. it's obviously going to be a tough weekend. we have got to hope, if you're a bull, that the leaders get together. if they don't, you're going to see more of the same that we saw today. that's how bad the employment number is. got to take this stuff seriously. i'm jim cramer. see you monday. hey, larry, tough day. what are you looking at? all right, jimmy. as you know, when things look awful in the stock market,

sometimes that can be the best time to stick your little toe in. good evening, everyone. i'm larry kudlow. welcome to a special edition of "the kudlow report." you'd think that over a trillion dollars in spending stimulus and two and a half trillion of fed pump priming should produce an economy a whole lot stronger than 69,000 jobs, or just 1.9% gdp. there's got to be a better way, and right now to save america, the president and the congress should immediately come together to extend the bush-obama tax cuts, mandate the keystone pipeline project, bipartisan for once could save america's economy. that's my take. now, stocks look like a disaster. the dow off 275 points. worst day of the year. sometimes after things look the worst and the carnage never stops, it can be a great time to buy. first up this evening, both team obama and team romney went at it on the jobs report.

romney went on the attack. cnbc's chief washington correspondent john harwood joins us with all the details. good evening, john. >> this was a jobs report that hit the obama white house hard because it affirmed a spring slowdown, the third in a row at a critical point in the election cycle and it had president obama acknowledging this is not the recovery that he's looking for. >> the economy is growing again, but it's not growing as fast as we want it to grow. our businesses have created almost 4.3 million new jobs over the last 27 months, but as we learned in today's jobs report, we're still not creating them as fast as we want. >> now, gallup affirmed that this is going to be a neck and neck race. their three-week average, 46% obama, 46% romney. mitt romney hustled on to cnbc to try to move the needle on those numbers to point the finger directly at president obama. >> the president's policies with regards to taxation, regulation,

as well as trade policies, labor policies, all of them have made it less likely for businesses small and large to want to hire more people. and when you add to that, the normal ups and downs of the world economy, it's been real tough on the american family. >> now, larry, i wouldn't real out the possibility if conditions get even worse that there could be early bipartisan action on the fiscal cliff, although i still expect that after the election, largely because i doubt republican lead rers going to be in the mood to sell out mitt romney the way that republican leaders did in 1996 to bob dole. i think they're going to keep these battle lines drawn right up until november. >> you know what, john? the possibility of a fiscal cliff compromise is exactly where we're going tonight. i think it's a key point. i thank you for it. john harwood, our man in washington, d.c. now, today's jobs report, of course, very disappointing. our question is how do we get out of this mess? there's no growth and virtually

no jobs. let's hear from our panel. tonight we have democratic pollster and 1996 clinton campaign advisor mark penn. we have wisconsin republican senator ron johnson. and cnbc contributor carly tewina. welcome back. senator johnson, sir, may i begin with you and pick up on a thought that john harwood mentioned, it's been on my mind also. look, i know this is a tough election. and i know which side you're on. but we also have the country to think about, and it could be that we are on the front end of a recession. this is a miserable jobs number today. the third in a row. in your opinion, sir, is there any chance of a compromise to extend what i'm calling the bush-obama tax cuts to go for keystone with all those shovel-ready jobs? what's your take, senator ron johnson? >> well, larry, i wish there were.

where the first compromise has to occur is between the president and let's say democrats in the senate. put forward a plan. let's see a budget. let's see what their plan is for long-term fiscal constraint. we haven't seen that yet. the president, i know, has presented some budgets, four of them where he hasn't proposed any solution to save social security or medicare. his last two budget thousands have had three votes in congress. the final tally, zero to 610. that's how unserious his budgets are. listen, larry, i'm willing to work with anybody who's willing to acknowledge the problem and then work with me in good faith to start solving the problems. like we've done here in wisconsin, where scott walker acknowledged the problem and made hard decisions, took tough votes to actually start fixing the problem. that's what we need to do in washington. >> mark penn, your man is in a heap of trouble because of what happened today, three straight months. the spring stall is back and then some. i'm not asking you so much a political polling question,

because i think i know what you're going to say. i'm asking you, what should obama do? the status quo is not working for him, attacking romney, he's not working for him. the employment and economic situation is not working for him, mark penn. what would you advise him to do right now, right in here? >> well, i think you're not going to see this kind of compromise with congress, but i think the president can once again put it to congress to move forward with an economic plan that would get the country on its footing. i think if you're the obama campaign now, you're going to do some retooling. you're going to really, i think go big with a new economic plan. i think you're going to hope the fed comes in here, because i don't think congress is going to come in here. and you're going to hold the course. remember, a lot of the swing states have lower unemployment. there's a manufacturing resurgence that's occurred in a lot of states, principally because of the gm bailout. remember, he's got a lot of strengths. he's winning in most of the

swing states. but right now, he's got to focus on a new economic plan. >> what's a new economic plan? before i get to carly, tell me just quickly, mark, what kind of new economic plan? >> well, i think he's got to invest more in education, in innovation. i think he's got to look towards a long-term future. i don't think it's going to be about fixing the problem of the moment here. i think fixing the problem of the moment, he's going to put it to congress. look, you can't just cut spending. that would be the wrong thing to do. you've got to raise revenues. you've got to keep the stimulus going here. the president's going to come back with a stimulus plan, an innovation plan, an education plan, and hit those big themes that he is the one you should have continued confidence in and romney's got nothing but failed solutions. romney has yet to really come to the plate with anything substantive. >> well, that's going to be debated here. carly, first of all, i want to ask you this.

why has business essentially, virtually stopped hiring in the last three months? and you know, today, buried in those lousy numbers, downward revisions for the two prior months. that is a terrible sign in terms of lost momentum for jobs. what's up with business? why won't they hire? >> well, first you see consumer confidence continuing to fall, which means people are not confident of buying. secondly, you have potentially a simultaneous global slowdown. third, you have a blanket of uncertainty weighing on job creators all across this country. what will my taxes be? what will my health care plan be? and can government even deal with the problems we have? that weight is incredibly heavy now. i think you're absolutely right. the only way to get out of this is through policy changes. i think obama's big problem right now is when he became president, when he had a democratic majority in the house and the senate, he put forward a

big economic plan. that's what he called it. he called it stimulus. he called it health care. he called it in state of the union addresses investments in innovation. solar energy and it didn't work. >> if it was going to work, it would have worked. listen to my friend mark penn who is a sharp, smart guy. that's not the issue. all i'm saying is if these things, which were mostly new spending, if that stuff was going to work, it would have already worked. >> exactly. >> it hasn't worked. >> that's why he has such a big problem. >> there you go. business confidence is lost. so it is true, senator johnson, you can't pick up a paper, you can't have a ceo on this network, cnbc, that doesn't say they don't know what their tax picture is. obama care is a tax picture. you have a lot of hidden taxes on investors. you've got the millionaires tax. but most of all, senator johnson, why is it not possible to extend -- and i'm calling them the bush-obama tax cuts.

you know why? because as you recall, in 2010, in december, obama signed on to what we used to call the bush tax cuts. he would be a hero now, he would bail out mark penn's polls if he signed on to those tax cuts and generated some business certainty that carly is talking about. ron johnson, let's not worry about that stuff. let's focus on the extending tax cuts and maybe a little keystone pipeline also. >> that would help. >> and obviously, larry, we should not be raising taxes on anybody in this weak economy. and i agree with carly. it is about uncertainty. but it's even worse than that. we have a president and an administration that is hostile to business. it wants to punish success and just an attitude change. in wisconsin, we had a government that came into office and said wisconsin is open for business. he's welcoming. we're not welcoming in this country. we're not making america an

attractive place for business expansion and job creation. we have to do that. an attitude change would make all the difference in the world. i think with mitt romney in the office, somebody who actually respects business, i think an attitude change could rapidly get our economy moving forward again. >> mark penn, i'm going to give you the last shot at this. i'm telling you, from the confidence and certainty and psychology that carly fiorina is talking about, and senator johnson, if you had obama come together with boehner on extending those tax cuts, if you had obama and boehner doing the keystone pipeline, which is shovel-ready and jobs-ready, you could save this thing. it's only may -- today is june 1. you could save it. the election is in november. but the country has to have an economy and the country has to have jobs. why not, mark? why shouldn't obama take a risk? because i'll tell you this, right now with this spring stall and these lousy jobs, mark, you know as well as i do, he's going

down. if he doesn't make a big change, if he doesn't show some difference, he's going down. >> well, i think you all rely too much on tax cuts. if that were the answer, that would have worked, too. nobody has raised any taxes here. >> how about the keystone? >> well, it's not the only project. look, i would like to see him get back the trillion dollars of offshore corporate profits that could be put into the system. i'd like to see the fed that really sat back while this was happening and didn't go into the next round of quantititive easing. get in there monday and really start to turn this thing around. it's not just all about tax cuts. >> tax cuts, deregulation, shovel-ready, keystone jobs, i don't know. we'll see. i'm awful sorry. we've got to end this. sort of getting kind of interesting. mark penn, thank you. senator ron johnson, as always, i'm going to talk to you on the radio tomorrow. carly fiorina, great to see you as always. coming up tonight, stocks

plummet on a pile of bad news. yeah, yeah, yeah. disappointing jobs, downbeat data from china and europe. but the dow gives up all its gains for the year. i'm sorry about that. but when the carnage looks the worst, sometimes that's when investors should think about coming in. to the victor comes the spoils. let's be risk takers. because don't forget, free market capitalism is the best path to prosperity, and that includes risk taking. i'm larry kudlow. we'll be right back. let's have keystone, for goodness sakes. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection,

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today's disappointing jobs report created the biggest selloff. the dow dropped 275 points to erase all 2012 gains. for the week, the dollar soared, but ten-year treasury yields collapsed. commodity indexes and oil deflated big-time. with all this let me say sometimes investors should be taking notes and thinking about putting their little toe in. sometimes things are darkest before they brighten up. if that's the right cliche. so let's talk. here to break down today's major

market plunge, we have phil orlando, barry knapp. okay, barry knapp, i just want to -- i've been talking deflation, front edge of recession and all the rest. but you've had this terrible plunge, at least 10% now. why not buy in a little bit here? profits are still rising. profits are still rising and interest rates are terribly low. normally that's good for value indications. normally that's good for stocks. why not? things are -- you know, blood is on the street. maybe now is the time to come in. >> i don't think we're far away necessarily. but there is a business of a question of timing, and so if your horizon is long-term, i think that there's a couple of scenarios that do cause the market to bottom out. one of them is we get policy responses from europe, we get a policy response from the fed

here in the u.s. those have -- will take time, maybe another month or so before we really get into that. for me, though, the scenario that's most powerful, the most bullish case that i can make for equity market, i'm not sure we're quite there yet either, but that scenario is what happened in 1980. in 1980, you'd certainly recall we had some horrific macroeconomic circumstances. cpi went to 14.8. gdp fell 7.9%. poll volcker raised rates from nine to 20. the stock market rallied 43% from the end of march through thanksgiving, as ronald reagan went from 30-plus point discount to a landslide. >> that's a good point. >> if those approval ratings for president obama slip towards 40, there's no way back and the markets may begin to look forward. >> phil orlando, if jobs fell, the level of jobs fell by one

200 thousand, i would never say to anybody put your little toe back in the water. but jobs are meager and anemic like the rest of the economy is anemic. and my point is this. profits are still rising, even while these treasury rates are ridiculously low, and the fed may come in with some added stimulus in one form or another. so, isn't there some room to kind of go in -- and you want to buy when things are cheap and everyone's bearish, not when things are expensive and everyone's bullish. >> we're there with you today. we're there with you today, larry. >> i love it. >> blood in the streets. i like your analysis. today's job numberns were terrible. you look at the slowdown we've seen the last three months, we're averaged about 100 thousand jobs a month. the three prior months, about a quarter million jobs a month. there's clear by an a deceleration in economic activity. we think that begs for some sort

of a policy response. so if you look at where the stock market is, when we got up to that 14-20 level, we thought stocks were a little ahead of themselves. we thought we would see a 5% to 10% pullback. we are at that 10% level now. >> yeah. >> and treasury yields dramatically overbrought at a 144 yield. krr you tell me what sectors you bought? >> we are playing the economic leverage, the improvement in the economy in the second half. so consumer discretionaries, financials, technologies. >> that's interesting. if i can translate that into your point about incumbents losing -- look, i personally believe there's a romney landslide. and i also believe that today's numbers work in that direction. i'm not rooting for a bad economy. i'm just saying look at what you've got. now, go back to your 1980 point and what phil is saying, this could be very optimistic. you have a change of regime in washington, d.c.

tax cuts, deregulation, more energy. that's what romney told us on this network earlier. all that stuff is bullish and it's six mogs away. it's less than six months away. >> yeah, i would agree. people have asked me sort of paint the picture for the next big bull market. my expectation is probably can't really get started until 2013 until we get our debt on a sustainable path, but if you think forward, you fast forward to a romney administration and you think that okay, first order of business will be sorting out this tax question. right after that, we probably get a headline coming across that moody's puts us on a downgrade. so then we're going to have to do entitlement reform. if you get those two things done in the first part of the year, you move on -- >> first hundred days. >> the industrial renaissance, the fact that by 2015 we will be competitive manufacturing with china, the better demographics

in the u.s. there is an unbelievably bullish story out tlch it's just a question of getting through. >> just last one, really quick. and we're rung over, but you guys are great. it would help for investors to see some better economic numbers. in other words, when we knew in last year that there was no double dip and the market kept going up through january or early february, because the numbers came in better. now we're in this plunge correction because the numbers are all worse. so i guess -- do you have to wait until you see better numbers, or if the numbers keep going down and stocks keep going down, you puff yourself up and you go in. >> it will be one of two ways. either we get some sort of a policy response, monetary or fiscal, or we start to see an improve nmt the data. this was not that week, in terms of the downgrade from gdp, the consumer confidence, the manufacturing numbers, the auto sales numbers. >> nothing good. >> energy prices are down 30 bucks over the last couple months.

the consumer is hanging in there. we think there are better numbers. >> i just want to say on a night like tonight on a market like today, it's not a catastrophe. we have all been in the business long enough to know this ain't nothing, for heaven sakes. people should not panic. phil orlando and barry knapp, two of the best of the best. coming up, mitt romney talks exclusively to cnbc. how would he bring our economy back from the brink? [ female announcer ] the next generation of investing technology

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mitt romney was also busy on another front today, filing his financial public disclosure report with the federal election commission. >> some classic friday night news dump-in washington. the romney campaign filed this the e-mail from the fdc went out at 5:04 p.m. let me give you a couple hiemts. the news is mitt romney is very rich. about how rich? about $250 million rich. a couple it the bits here. he had some stock in walmart of mexico that he sold, about $5,000 of that stock sold by his financial advisors. he made about $50,000 in royalties for his book "no apology: the case for american greatness." i wish my book had done so well on royalties as well as mitt romney's. meantime, jam wants to buy

out 45,000 salaried workers and retirees. the company saying it could save $26 billion in pension and health care costs. the stock ended the day about where it started. the auto sales are a bright start. most car makers, including gm, reported double digit increases in mail. when larry returns, jobs, the economy and the election are all connected. "the kudlow report" will be right back. this is $100,000. we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally.

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